These days, we often hear vegetables prices go up “sharply” and “immediately” in Japan.One of the biggest reasons is that Supermarkets purchase varieties of vegetables with reasonal stock for us customers at any time even when at poor harvest.So that vegetables has been comodities “traded at a higher price” in “lack of a little production”. You will find that behavior makes demand curve steeper than the one in the past.
In the opposite case, when we are at good harvest, vegetable prices sharply drop very quickly.This is mainly because farmers entrust vegetable market without showing “the desirable retail price” where only “demand and supply” is the key factor for price discovery.Vegetables are bought “quite inexpensively” in case buyers think “It seems to remain even a little.” due to buying power of retail stores, then.We also find farmers receive the rest which deducted the various costs from the price traded.It is difficult for farmers to run their business in this case. It is often reported that there are farmers who dispose crops at a good harvest to reduce the supply to the market, which is not the correct way, isn’t it? It is time to think how the vegetable value can reflected onto price. We think the nutritional quality can be price factors for product value.
We have investigated 5year histroical price data of 49 items in vegetable market with mathmatical approach in order to see eihter there is any correlation between vegetable prices and nutritional value.People pay more attention to their health these days. With that health-consciousness, there began to come new vegetable breeds enriching the specific nutrients with higher price in stores recently.However, we could not find significant correlation between them traded in vegetable market.
We need further study how vegetables are traded in the market , research what would be the vegetable value to reflect onto price from various perspectives going forward.
Here are the analysis result of our mathmatical approach.
We have taken a look into how prices are decided in vegetable market where Demand-Supply is the main key factor to trade. Now, we will overlook distibution channel and farmers’ profitablity and incurred cost upto retaili stores.
Do you have any idea how much cost is necessary for the store price after the trade in vegetable market and how much money farmers receive eventually?Of course,it depends on items and situation,though, store price is almost twice.
We go through what Demans-Supply curve is and what Willingness to Pay is, then we will see figuring out WTP provides us more business strategy.
This business strategy based on WTP works for price maker not for price taker, we believe how to assess WTP by farmers is the 1st thing to run their business stably,profitably.
However , have we discussed how to cut the cost so far for agriculture business, haven’t we?
We have analyzed how vegetable market price behaves,now we will go through how vegetable market works in Japan.Here we will go to the history of vegetable markets and functions expected.
Vegetable markets were organized almost 100 years ago, but there are several changes since then. We study what changes have been made and why these changes are necessary.
We will see why retail stores have influence on market prices however they are not present when trading.We investigated this following 5 competition aspects.